Hot buy for the week: Swiss Glasscoat Equipments

Financial Performance:

For Q2FY15, SGEL has reported sales of Rs.24.29crore as against Rs.16.16crore. Despite 48.71% higher provisioning for income tax, profit after tax has gone up nicely by 49.36% to Rs.1.18crore. For H1FY15, SGEL has reported sales of Rs.45.09crore as against Rs.32.45crore in H1FY14. Despite 29.11% higher provisioning for income tax, profit after tax has gone up by 32.5% to Rs.2.12crore. EPS for the Q2FY15 is Rs.2.38 & H1FY15 is Rs.4.26.

Future Outlook

For FY15, SGEL can deliver net sales of Rs.95crore and profit after tax of Rs.4.5crore translating into EPS of Rs.9 while for FY16, SGEL can deliver net sales of Rs.120crore and profit after tax of Rs.5.3crore translating into EPS of Rs.10.6. Script is trading at 10.2xFY15(E) EPS & 8.7xFY16(E) EPS which is extremely low against its peers. The company has paid regular dividend to its shareholders. It has paid 22% dividend for FY13 & it has declares 25% dividend for FY14.

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Investors can buy this stock with a stop loss placed at Rs.79. On the upper side it will zoom up to Rs.125 levels in medium term while it will zoom to Rs.160 levels in next 12-16 months.